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JAMB Principles of Accounts 2007 Question 34

Question 34

Bad Debts and Provisions

Debtors ₦20 000
Provision for bad debts 10%
Provision for discount on debtors 5%.
The provision for bad debt is

  1. A.₦2 000
  2. B.₦800
  3. C.₦3 000
  4. D.₦1 900.
Show the answer and explanation

Answer: A (₦2 000)

Explanation

10% × ₦20 000 = ₦2 000.